But the controversial law has split Zimbabwe's unity government, established after the law was passed.
Morgan Tsvangirai, the prime minister and leader of the Movement for Democratic Change, said the law was "null and void" as it was not debated by the new cabinet.
Mugabe defended the law at his 86th birthday celebrations on Saturday, saying they were designed to broaden Zimbabwean participation in the economy.
"This law will enable us to examine every large company in the country and determine whether the ownership principle has been observed," Mugabe told a crowd gathered in Bulawayo, Zimbabwe's second largest city.
Supporters deny comparisons to the takeover of white-owned farms, instigated in 2000, and say that shares in companies will have to be bought.
David Monyae, a South Africa-based political analyst, told Al Jazeera that the law itself was not controversial, but that "the key issue is how you go about doing it".
"The entire concept of 'indigenisation' is nothing new or unique to Zimbabwe. Here in South Africa we have BEE - [Black] Economic Empowerment - and in other areas in western Africa and the like you have what you call 'localisation'," he said.
"I think it's aimed at spreading the wealth, to ensure that wealth creation in Zimbabwe is shared by a much wider base. But ... the policy has to be written in consultation with all stakeholders in Zimbabwe, and ensure that it advances the economic growth of the country before [the] rush for redistribution."
Other analysts warn that the law will probably damage Zimbabwe's already ailing economy and jeopardise foreign investment.
"No potential investor is willing to be reduced to minority ownership, despite providing the majority of the capital, state of the art technology and ready access to their markets," Eric Bloch, an economic commentator, was quoted by Reuters as saying.
Mugabe's Zanu-PF has also come under fire for throwing lavish celebrations for Mugabe's birthday, which actually fell on February 21.
The celebrations were estimated to cost about $500,000, while most of Zimbabwe's population lives on below a $1 a day.